Property Owners in Spain and TAX!

All property owners in Spain are required to pay three different taxes each year. These taxes are: the Annual Tax on Real Estate, Wealth Tax and Income Tax, the evasion of the payment of these taxes can derive an audit.

The Property Income Tax is calculated by applying 2% to the book value (or 1.1% if this value has been revised after 1994).

If the property is being rented (and the income declared to the authorities!), The Income Tax is not applicable and if only part of the year is allowed, if the property is vacant of tenants. In this case, revenues are taxed at a fixed rate of 24%, without deductions.

Owners who have purchased a property through a foreign company and are required to perform an audit, must present a certificate from the Tax Office of the country of residence that shows the tax residence of the company and the shareholders in a country with an Agreement. of double taxation (all EU countries), in order to avoid the special tax on foreign companies, currently at 3% of book value.